Practice: Cost Behavior & Profitability Analysis Quiz Quiz | Business Analysis & Reporting (BAR)

Question 1

What is the primary purpose of cost behavior analysis?

Answer

Determine income tax expense

Answer

Understand how costs change as business activity changes

Answer

Prepare the balance sheet

Answer

Calculate depreciation methods

Question 2

Which type of cost remains constant in total within the relevant range regardless of activity level?

Answer

Fixed cost

Answer

Variable cost

Answer

Mixed cost

Answer

Step cost

Question 3

Which statement about variable costs is TRUE?

Answer

Total variable cost remains constant.

Answer

Variable cost per unit increases as production increases.

Answer

Variable costs do not depend on activity.

Answer

Variable cost per unit generally remains constant within the relevant range.

Practice Quiz